China Growth Stocks

[GorillaGorilla]

LLEN - my thoughts are we know they have 3 mines and we know they are getting at least 300K tonnes of coal per year. So there's a base line to the value of the company.

The argument the detractors have made is the margins are higher than most. The JPM guy on the CC described it as "LLEN is on the bottom quartile on Chinese cost curve?". LLEN themselves claim they have a "lean and mean" operation (I guess you could attribute it to the bean counter mentality of the board down?) and that they provide a service by buffering supplies of the coal and supplying it when needed at a higher margin.

I know you were looking at margins - did you think 22% was too much? Even if you half the earnings the forward P/E is around 10 - compared to, think, 16 for the industry average.

I can't see how you can fake the Bowie mine expansion? *If* they start exporting to China it would be a silly short.

I can't believe this is an outright fraud. Really, not sure what people expect at this point. My feeling is that this is one massive volatility high for the hedge funds.

It's an "odd" situation.

rich